INFLUENCE OF FINANCIAL LITERACY ON ENTREPRENEURIAL PERFORMANCE AMONG MICRO AND SMALL ENTERPRISES IN KERICHO COUNTY, KENYA

Abstract

Financing has been identified as a key element for micro and small enterprises to thrive in developing countries. Researchers have argued that lack of financing literacy is among the key problems for micro and small enterprises thus the need to study influence of financial literacy on their entrepreneurial performance. The study was guided by the following specific objective; to assess financial literacy of micro and small entrepreneurs and how it influences performance. The study adopted a cross sectional survey design from a population of 7277 micro and small enterprises in Kericho County. Stratified and simple random sampling was used to sample the 380 micro and small enterprises. Questionnaires were used in the data collection phase of the study. Descriptive statistics included frequencies and percentages while inferential statistics included correlation and regression analysis models with the aid of SPSS version 25. The research findings indicate that there exists a statistically significant positive causal relationship between financial literacy and entrepreneurial performance among micro and small enterprises to credit in Kericho County. It was concluded that micro and small enterprises have not been provided forums by financial institutions where they were educated and informed on issues financing.